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Spotify’s Antitrust Case Against Apple, Explained

Daniel Ek, CEO of Swedish music streaming service Spotify, poses for photographers at a press conference in Tokyo on September 29, 2016. Spotify kicked off its services in Japan on September 29. / AFP / TORU YAMANAKA (Photo credit should read TORU YAMANAKA/AFP/Getty Images)

Spotify is gearing up for a heated antitrust dispute with Apple and their music streaming service, Apple Music. On Wednesday, the Swedish company filed an antitrust complaint against Apple with the European Commission, alleging that the American tech giant was attempting to “purposely limit choice and stifle innovation” in its App Store. Apple forces third-party app creators to surrender 30 percent of the profit from every in-app purchase, in theory making it nearly impossible for Spotify to compete with Apple Music at the same $9.99 price point.

“Apple is both the owner of the iOS platform and the App Store—and a competitor to services like Spotify,” the company’s CEO Daniel Ek wrote in a blog post. “In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”

Unlike other recent calls to break up tech giants like Apple, Spotify’s statements reflect an effort to change Apple’s management of the App Store, rather than completely remove it from their ownership. Ek goes on to note that if his company were to opt out of Apple’s payment system, Apple “applies a series of technical and experience-limiting restrictions on Spotify” including blocking app updates and limiting Spotify’s ability to connect with Apple products like Siri, HomePod, and Apple Watch, which allegedly favor Apple Music integration.

“We aren’t seeking special treatment,” Ek’s post continues. “We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren’t subject to the Apple tax and therefore don’t have the same restrictions.”

Later that week, Apple responded to the allegations, claiming that Spotify “wraps its financial motivations in misleading rhetoric.” A spokesperson for the company denied Spotify’s antitrust claim, saying that Apple “wants more app businesses to thrive—including the ones that compete with some aspects of our business.” The company also disputed Spotify’s point about in-app purchases, claiming that apps earning revenue through advertising (like Uber or Deliveroo) don’t pay Apple.

“We share Spotify’s love of music and their vision of sharing it with the world,” the statement continues. “Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze—it’s also artists, musicians, and songwriters.”

Since then, Spotify has fired back at Apple, calling the company an outright “monopolist.” “Every monopolist will suggest they have done nothing wrong and will argue that they have the best interest of competitors and consumers at heart,” the company shared in a statement. “In that way, Apple’s response to our complaint before the European Commission is not new and is entirely in line with our expectations.”

“We filed our complaint because Apple’s actions hurt competition and consumers, and are in clear violation of the law,” the statement continues. “This is evident in Apple’s belief that Spotify’s users on iOS are Apple customers and not Spotify customers, which goes to the very heart of the issue with Apple. We respect the process the European Commission must now undertake to conduct its review.”

The European Commission is set to review the case in the coming weeks, potentially reigniting the public dispute.